Downtown Houston+ is doubling down on its efforts to connect pedestrians, residents and businesses at the street level.
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The nonprofit umbrella organization that manages Downtown Houston’s economic development and revitalization efforts announced several project updates today, including a new market grant program to help existing bodega owners capture more foot traffic.
“The market is a necessary component to building a livable neighborhood, and what we're most interested in is continuing to grow our Downtown residential base,” Downtown Houston+ CEO Kris Larson said in an interview with Bisnow.
Downtown Houston+ also plans to expand its Cool + Connected Corridors program, work with Phoenicia Specialty Foods to reimagine how the store meets the street, and move on to Phase 2 of its major revamp of the underutilized Tranquility Park. These projects will build on the recent completion of the Main Street Promenade and Cool + Connected Corridors Phase I, as well as four decades of a diversification journey.
Attracting residents and nonemployee visitors to Downtown Houston remained a top priority when the pandemic dealt a blow to the office market, leaving the submarket 25% vacant today, a rate 2% higher than Houston overall. The management organization said its new projects build on a year of public realm improvements, as well as major public and private investments like the $180M Toyota Center renovation and the $50M upgrade of 910 Louisiana.
These projects could bring more people to the street level rather than the underground tunnel system, creating a livelier, more attractive environment and improving the perception of the neighborhood.
“It took 40 years to build this tunnel system,” Larson said. “It's going to take probably as long to move away from that type of thing, or to figure out what that future life is going to be.”
Market Focus
Downtown Houston+ launched the Fresh Start Market Grant Program with its pilot location, Main Food Store, in August. The grant program will provide $50K per business to support operational and layout improvements, and participating businesses will be eligible for other Downtown Houston+ grants, the organization said.
The nonprofit zeroed in on enhancing grocery offerings after a 2025 study found that Downtown residents spend $19M annually on groceries but spend $17M of that outside of Downtown. Rather than trying to attract and build new grocery stores, Downtown Houston+ set out to identify what stores already exist and how they can better interact with the different populations of Downtown, including residents, employees and visitors, Larson said.
“We literally sent staff with clipboards into every storefront and said, ‘OK, do they sell milk? Do they sell eggs? Do they sell chips and candy bars?’” he said.
They identified 11 bodega-style businesses that could potentially benefit from an updated merchandising plan or display, improved exterior facades and other feasible changes.
Main Food Store was very willing to work with Downtown Houston+. The store owners also own the building, making it a strong pilot candidate, Larson said.
The scope of work for enhancements at Main Food Store will be finalized in November. Concentric Community Advisors is guiding the pilot’s planning and design alongside Downtown Houston+. Once the pilot is complete, Downtown Houston+ plans to expand the program next year.
Downtown Houston+ also unveiled a rendering of the second location of Henderson & Kane, a neighborhood favorite market and barbecue restaurant in the Sixth Ward. Supported by $500K in incentives from the Downtown Redevelopment Authority, the second location will open in the summer of 2027 in the Baker-Meyer Building overlooking Market Square Park.
“They're no longer [just] a neighborhood-serving business,” Larson said. “They become now a business that can take advantage of the multiple overlapping markets that we have in Downtown.”
Grocery is a critical element for the lifestyle side of the equation and building a sustainable Downtown neighborhood, but it can't complete that mission alone, he said.
More Projects
Downtown Houston+ is moving on to Phase 2 of its Cool + Connected Corridors program, which adds shade structures, trees, landscaping and pedestrian lighting to lower ambient temperatures and create a more pleasant pedestrian experience.
The trees and shade structures from Phase 1, along the Main Street Promenade and Texas Avenue, helped lower temperatures by up to 30 degrees, according to the organization. Phase 2 will fill gaps between pedestrian-friendly streets, including Dallas Street between Milam and Bagby streets, and Congress and Milam streets near Market Square Park.
Design will begin in early 2027, and improvement installation is slated for late 2027 into 2028.
The organization is also moving on to Phase 2 of improvements at the underutilized Tranquility Park. Phase 1 focused on cleaning and repairs, while Phase 2 will add 20 trees, native landscaping, pedestrian lighting, a colorful shade installation and a decked gathering space over the central fountain pools.
Construction is expected to begin in the spring of 2027.
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The Office Dichotomy
Downtown Houston has more Class-A office space than any other submarket in Houston and has seen over 1M SF of leasing activity year-to-date, including renewals. The average lease size in Downtown is over 15K SF, which is more than three and a half times larger than the average of competitive submarkets, per Downtown Houston+’s data.
Yet the submarket has a higher office vacancy rate than Houston as a whole, with much of it concentrated in older buildings, for which options are limited. Office-to-residential conversion seems like an obvious answer, but it is complicated by factors including large floor plates and limited rent income potential, Larson said.
It works in certain cases, usually by taking advantage of historic preservation tax credits. Chicago-based 3L Real Estate plans to convert One City Centre, a 780K SF office tower at 1021 Main St., into a residential building with 660 traditional apartments and 93 corporate suites/hotel apartments.
The city is selling a 27-story office building at 611 Walker St. that it plans to vacate, and Cushman & Wakefield’s Tim Relyea is pitching it for demolition and redevelopment.
“Demolition can be a part of a strategy,” Larson said. “It is also very expensive, and so you would need somebody to be able to absorb the demolition costs on top of the acquisition costs to make a new build make sense. That’s even harder to do.”
But Downtown Houston’s office market is not as gloomy as outsiders may perceive. It suffers from uncertainty about the upcoming North Houston Highway Improvement Project and logistics for potential tenants, like securing employee parking, Larson said.
Those obstacles can be overcome by education and programs like the Fresh Start Market Grant Program.
“One of the things that we believe we can solve for is being a reliable source of information,” Larson said. “It is helping people know what they have around them. Introducing them to the community, helping them see all that's around them, and how that complements the work there.”
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